Updated 10:30 a.m., 4/30/2015
A panel of House and Senate lawmakers reached an agreement Tuesday on the final draft of the overall state budget, but some big spending questions will be settled later this week.
The conference committee unanimously approved a budget that is $4.3 million over Gov. David Ige’s initial request for fiscal 2016, which starts July 1, and $53 million under his request for fiscal 2017.
The lead negotiators on House Bill 500 — House Finance Chair Sylvia Luke and Senate Ways and Means Chair Jill Tokuda — said they worked with the state departments to take care of some of their additional needs for next year. But they want to continue those discussions and see what kind of progress is made before setting more money aside for the second year of the biennium.
The conference draft of the state budget bill continues to rely on an $844 million carryover balance from 2013. But the state has rapidly drained that surplus and is working to get out of deficit-spending mode.
Update Last year, Paul Harleman, the Senate Minority Research budget director, projected a worst-case scenario of a $1 billion deficit by 2019 if spending cuts weren’t made or taxes weren’t increased.
The situation has improved since then and as of now the state is projected to be out of a deficit position by fiscal year 2018. However, that financial plan doesn’t account for all the additional collective bargaining costs for contracts expiring June 30, 2016.
“One of the things that both the House and the Senate wanted to make sure of is that we really try to quickly reduce our deficit spending,” Tokuda said after Tuesday’s meeting.
“We would have loved to have said yes to every single request that came before us; we just can’t do that,” she said. “So in the next few days we will be looking at what can we afford to do with those additional bills before us.”
The conference committee also approved the budgets for grants-in-aid and capital improvement projects.
Rep. Ty Cullen took the lead on whittling down GIA applications for the House and Sen. Ron Kouchi and Rep. Kyle Yamashita worked on the CIP budget. Details are to be posted on the Capitol website soon.
Some of the GIA projects approved include $450,000 to design and construct a new Diamond Head Theatre; $1 million for Goodwill Industries of Hawaii to renovate its Honolulu Career and Learning Center; $1.5 million for Ola Ka Ilima Arts Center to plan, design and construct an 84-unit affordable working-force housing development in Kakaako; $2 million for the National Kidney Foundation of Hawaii to plan, design, acquire land and build a program development center; and $1.5 million for the Pacific American Foundation Hawaii to plan, design and build a new facility for education, research and employment programs in Kaneohe.
The full House and Senate is expected to vote on the more than $26 billion two-year budget next week.
There are numerous bills with huge fiscal implications that lawmakers are working to finalize — or kill — by Friday’s deadline.
Lawmakers are set to meet Wednesday afternoon to continue discussing plans for the state to buy Alii Place, a 25-story office building in downtown Honolulu. The price tag is estimated at $90 million, but supporters say it’d be a third of the cost of designing and constructing a new building to house government offices.
Additional spending requests continue to arrive at the Legislature’s doorstep.
Luke said one of the reasons the committee took “kind of a conservative approach” to the budget this session was to accommodate collective bargaining agreements that have come in recently.
The governor submitted requests last week to fund $201,286 for the firefighters union; $4.1 million for two United Public Workers bargaining units; and over $58 million for the Hawaii State Teachers Association.
Highlights of the operating and CIP budgets, as compiled by House staff, include: